Techs copping it from competition regulator

Group buying schemes are among the fastest-growing source of consumer complaints, according to Australia's national consumer regulator the ACCC, and it's started rolling its machinery to get them to clean up their act.

Scoopon, which was last year among a number of coupon outfits the watchdog warned about their business practises, is being taken to court accused of misleading both consumers and businesses that sell their products or services on the site.

In its case filed in the Federal court, and due to begin on July 25, the ACCC says consumers were misled on several points: their ability to redeem their vouchers, their refund rights, and the price of the advertised goods.

The ACCC also says participating businesses were misled about the fees payable, and says Scoopon claimed that “between 20 percent and 30 percent” of vouchers would not be redeemed. Businesses that set up their voucher deals on that basis could easily find themselves unable to deliver.

Scoopon's response doesn't acknowledge the court case. The company promises to “review the ACCC allegations and work to resolve the issues raised,” adding that “Since we began, Scoopon has improved its processes for selecting and managing deals to improve our customer experience and is a founding signatory to the ADMA Code of Practice, which is aimed at increasing consumer confidence in dealing with Group Buying platforms.”

The Australian cites an e-mail to “what appears to be a golf course” (here but probably paywalled), in which a Scoopon representative tells the prospective customer:

“From your last email I believe you were considering whether or not the club could handle the potential of 1500 people playing on the course, this is understandable, however, it important to note that this is subject to availability, so please don't feel as if members and their guests will be missing out on the opportunity to play. If there are spots available then let Scoopon customers play if there is not, then get them to re-book on a suitable time.

“The email continues: 'I would expect us to sell between 800-1000, based on these numbers the club would make over $35,000, of this about 20-25% will not redeem their Scoopons which is about $9000 of services you will be paid for and not providing any service. This effectively covers the commission.'”

When it began reviewing the group buying industry last year, the ACCC said complaint numbers had passed 3,700 in 2011.

If Scoopon loses, it can commiserate with HP, which on Friday copped a $AU3 million fine for misleading both consumers and retailers about refund rights. Rather than battling to the bitter end in a court case launched last October, HP has settled with the ACCC.

HP had misled consumers about the warranty rights and remedies available to them in Australia, by imposing warranty conditions at odds with the local legislation. The conditions HP was trying to impose were then put in its international call centre scripts to make it difficult for consumers to make warranty claims, something which ACCC chairman Rod Sims described as “widespread and systemic” misconduct.

In the proceedings, the Federal Court also found that “HP represented to retailers that it was not liable to indemnify the retailer if the retailer failed to obtain authorisation from HP before giving a consumer a refund or replacement.”

The court has ordered HP to set up a consumer redress process. ®

Update: HP has issued an official statement on its settlement with the ACCC, below.

Individual, corporate and government customer satisfaction is the cornerstone of HP’s business. We deeply regret that in the instances identified by the ACCC, HP fell short of our core commitment to high standards of service for Australian consumers who purchased our HP-branded desktop computers, notebooks/laptops and printers and of our duties under Australian consumer laws.

Through discussions with the ACCC with a view to resolving the legal proceedings brought against HP, HP has voluntarily consented to Federal Court orders. Under the orders, we have committed to, among other things, review our warranty and support practices against the Australian Consumer Law and implement a robust program to monitor and achieve ongoing compliance.

HP is dedicated to honouring our obligations to Australian consumers under the Australian Consumer Law. We will provide customer support to assist consumers in resolving concerns with HP products in accordance with the Australian Consumer Law and have established a specific consumer redress program (involving a customer contact centre) to help with past concerns relating to HP-branded desktop computers, notebooks/laptops and printers.

We have also taken steps to adjust our consumer policies and practices and re-train our Printing and Personal Systems team members. HP will continue to design products distinguished for their outstanding quality, reliability and ease of use and looks forward to delivering high-quality service to our Australian customers.

Contact details for our new customer contact centre which is ready to assist consumers that have had a problem with their HP-branded desktop computer, notebook/laptop or printer in the past are: